DIVERSITY IN DECLINE - INSTITUTIONAL ENVIRONMENT AND ORGANIZATIONAL FAILURE IN THE AMERICAN LIFE-INSURANCE INDUSTRY

This study examines organization failure during a volatile period of realignment in the American life insurance industry, specifically in New York State from 1881 to 1931. The article casts key enactments in the state regulatory environment as indicative of change in the institutional environment. It asks whether pivotal regulatory change targeted at three distinct organizational forms (commercial life insurance companies, commercial assessment insurance companies, and fraternal benefit societies) affected the survival of those forms, net of the liability of newness and smallness. In doing so, the study seeks to illuminate how the institutional environment both expands and restricts the viability of organizational forms. The outcome in life insurance is an increasingly uniform, less diverse, industry.